Date: February 15, 2024
Sanctioning the Digital Currency Program
The U.S. Treasury has taken a significant step by imposing sanctions against various entities that are believed to be involved in Iran’s central bank digital currency (CBDC) platform development. The Office of Foreign Assets Control (OFAC) has identified and targeted a network of companies accused of illegally exporting U.S. technology to Iran.
Entities Under the Lens
Among the entities sanctioned is the Informatics Services Corporation (ISC), which is affiliated with the Central Bank of Iran. The ISC has been instrumental in developing Iran’s CBDC platform. The OFAC’s decision to sanction ISC is based on their support and provision of services to the Central Bank of Iran, a move considered illegal under U.S. law.
The Web of Sanctions
The sanctions extend beyond Iranian borders, with the OFAC also targeting Advance Banking Solution Trading DMCC, a UAE-based company. This entity has been acting as a façade for ISC, misleading U.S.-based vendors about the end-user of the exported products, thus funneling them into Iran.
The CBDC Initiative in Iran
Iran’s interest in developing a CBDC is part of a wider trend among nations considering the adoption of digital currencies. The potential benefits, such as improved cross-border transactions, reduced costs, and greater financial inclusion, are attractive to many countries. ISC began its work on the digital rial using Hyperledger Fabric technology back in 2018, showcasing the nation’s commitment to this digital transformation.
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